FCC Cost Realism & Price Analysis 5

Question 1

Under FAR 15.404-1(b), which is the PREFERRED price analysis technique when adequate price competition exists?

Accepted Answer

Comparison of proposed prices received in response to the solicitation

Answer

When two or more responsible offerors independently compete, comparing those prices is the preferred and most reliable price analysis technique per FAR 15.404-1(b)(1).

Question 2

A contracting officer determines that a sole-source offeror's proposed G&A rate of 8% is unrealistic given that the offeror's disclosed rate is 22%. What action is appropriate?

Accepted Answer

Use the 22% disclosed rate to establish the most probable cost for evaluation and negotiation

Answer

A proposed G&A significantly below the disclosed/historical rate signals unrealistic pricing; the CO should use realistic rates to establish most probable cost and as a basis for negotiation.

Question 3

Which term describes a cost that is specifically excluded from reimbursement under a government contract by FAR Part 31?

Accepted Answer

Unallowable cost

Answer

Unallowable costs are those explicitly disallowed by FAR 31.205 (e.g., entertainment, lobbying, certain legal costs) and cannot be billed to or reimbursed under government contracts.

Question 4

When performing cost analysis, what is the purpose of evaluating 'cost allocability'?

Accepted Answer

To determine whether a cost can be assigned to a specific contract or cost objective based on the benefit it provides

Answer

Cost allocability under FAR 31.201-4 requires that a cost be assignable to a contract in accordance with the relative benefits received or other equitable relationship.

Question 5

What is a 'most probable cost' estimate, and how does it differ from the proposed cost?

Accepted Answer

It is the government's upward or downward adjustment of proposed costs to reflect realistic probable performance costs, used only for evaluation ranking

Answer

Most probable cost is the government's adjusted estimate of what a contract will likely cost based on realism analysis, used to rank offerors fairly regardless of unrealistically low bids.

(FCC) Federal Contracting Certification Practice Test

(FCC) Federal Contracting Certification Practice Test

FCC Cost Realism & Price Analysis 5